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My wife and I like most people have mutual funds in our Roth and Rollover IRAs. I track the performance of these funds along with the rest of our portfolio very closely. In my opinion one of the mid-cap mutual funds we have investing in for years has underperformed. The first year I let it go because of their excellent long-term performance track record. However, now it has been over two years since I first notice this lag in returns so a couple weeks ago we decided to switch to a different mid-cap mutual fund that I like better. I have invested in this fund family and this fund before so I was comfortable making the switch. With the other mutual fund we wanted to switch there was a better fund within the family of funds so they will keep our business–just in a different fund.

These decisions have set off a change of events that have gotten on our nerves quite a bit. Since my wife held these mutual funds in her portfolio before we were married she had to contact her current brokerage firm to change her name on the account so it could be transferred. They were far from helpful and took their own sweet time and requested a lot of proof of marriage. Hopefully the funds will be transferred to own new IRA mutual fund fun by next week. Now the mutual fund where we were simply changing funds within the family were equally as difficult and needed an overabundance of proof of marriage to change her name on the account. Conversely, it was no problem for them to switch for one mutual fund to another–so if they need proof to change the name on the account how can they allow a fund change without that same proof?

We also have a global mutual fund that I like a lot because the managers have been around for decades and they have consistent performance. Now that has not been too great over the last couple years because global funds have skyrocketed and because our fund is more conservative it has not realized all those gains. Anyway, my wife needed to change her name on this account as well. We were not removing our money from the account, but they require a Gold Medallion (basically a Notary Public) on the document proving that she is who she says she is. Normally this would not be a problem, but because we bank through online banks they could not provide this for us. Neither could our brokerage firm–they said they only have that in their headquarters. So we might need to open a bank account at a local bank in order to get this gold medallion to change her name.

All of this has been going on for weeks and has been a pain in the *#&!. Hopefully we can resolve this soon so we can get on with our investment changes. Who knew that changing a name would be so difficult?

From IBD.com

‘Lazy portfolios’ win again, beat S&P 500!

No fifth year in the bull run? That was last week’s red flag. So how do you protect yourself? Let’s begin with that good old Wall Street adage: “You make your money in stocks, you keep it in bonds.” Here’s the modern version: “You make money in stocks, you keep it in a lazy portfolio!” See Paul B. Farrell.

Some tax deductions and credits will be harder to find this year

This year, thanks to Congress making tax-law changes long after the IRS printed its forms, some taxpayers will spend a fair amount of time trying to figure out how to take the deductions that don’t appear on Form 1040 and elsewhere. See Tax Watch.

How to spend more money in retirement without going broke

Congratulations if you’ve saved enough money for a comfortable retirement. Now comes the hard part: spending it. See Life Savings.

Grantham’s latest 7-year forecast sees small-caps and most stocks lagging

Stock mutual-fund investors will have a difficult time making money through 2013 unless they focus on megacap blue chips or bonds, says investment strategist Jeremy Grantham. The latest forecast by the Boston-based research and consulting firm he chairs holds negative outlooks for almost every type of stock asset class, whether foreign or domestic. See Fund Watch.

Emerging markets managers grow bolder, less fearful of a major turndown

Investors holding their breath for a major correction in emerging markets may want to exhale a little, according to fund managers emboldened by a five-year rally for the sector and positive fundamentals. See Global Investor.

Apartment market not taking off, but then neither are rents

Despite signs of a pickup in multifamily construction in government data, housing analysts say a weak condominium market and slow growth in demand for rental units will prevent a surge in building in 2007. But they also say market conditions won’t support big rent increases for apartment dwellers. See full story.

Clear skies bring calm in insurance rates

Whew. The year 2006 is in the books, with no major Atlantic hurricanes or other such disasters. That’s definitely a good thing, especially for those in vulnerable areas. But as it turns out, it will help the rest of us financially too. Finally, after years of persistent annual increases, some in the double-digit range, property insurance rates — homeowners, renters and automobile insurance — should moderate. But is it time to celebrate? See Jennifer Openshaw.

Student-loan rate cut would mean savings, but lenders may balk

For the millions of borrowers who collectively face billions in college debt, the impact of a congressional proposal to slash interest rates on student loans remains murky. Although college debtors would welcome some relief, its form is in question. See full story.

Vista: Worthy, but largely unexciting

A new version of Microsoft Windows, the world’s most popular and important computer operating system, will finally arrive for consumers on Jan. 30. It has taken the giant software maker more than five years to replace Windows XP with this new version, called Windows Vista — an eternity by computer-industry reckoning. Many of the boldest plans for Vista were discarded in that lengthy process, and what’s left is a worthy, but largely unexciting, product. See Personal Technology.

Airline miles: Use them or lose them

Hoarding frequent-flier miles until the right trip opportunity comes along? You may not have much more time. Two major airlines have changed their mileage policies. See Marshall Loeb’s Daily Money Tip.

Some more solid information on annuities from Kiplinger’s Personal Finance.
If you own a deferred variable annuity or an equity-indexed annuity that you no longer want or need, you have several options. There are three things to consider when determing this:

1. How long you have owned the annuity
2. The amount of the surrender charge
3. Tax consequences of cashing out

Surrender charges

If you still have several years to go before the surrender period expires, it’s best to sit tight. In most cases, it’s not worth paying a surrender fee just to find a new investment. Most deferred annuities let you withdraw up to 10% of your balance or initial investment each year without a surrender charge. That may provide you with sufficient retirement income while the clock runs down on your surrender period.

If the surrender period is almost over and the surrender charge is dwindling, it may be time to jump ship, even if it means taking a small hit to get out. Moving your money to a company such as Vanguard or Ameritas that offers annuities with low annual fees and better investment choices could save you money in the long run.

Tax consequences

If you own the annuity inside an IRA or other retirement account, you can cash it out and reinvest the money without a tax hit as long as it stays in the account. Any money that you withdraw from a retirement account (other than a Roth IRA) is taxed at your regular income-tax rate, not the lower capital-gains rate reserved for most other investments. The part of the payout that represents a return of your initial investment would be tax-free.

Blow the whistle

If you believe you were misled when you bought the annuity–especially if you’re hit with a big surrender charge that you did not know about–contact your state insurance and securities regulators. That sometimes motivates the insurer to let you withdraw money from a contract without penalty.

At the very least, filing a complaint could warn other investors. “We often hear that senior citizens are embarrass because they feel they’ve been taken advantage of,” sats Barry Lanier, chief of the Bureau of Investigation for the Florida Department of Financial Services. “But they can helpboth themselves and future victims.”

Jim Cramer recently picked BBI to take off and since then it has (even before he recommended it the stock had performed well). Now that Blockbuster (BBI) has provided customers the option off online service, similar to Netflix (NFLX), they are back from the dead. Moreover, Blockbuster has loaded up on subscribers and by the end of 2007 they estimate that part of the business could be up 5 fold. BBI allows you to mail it in a la Netflix (NFLX) or return it to the store and this is seen and what is driving subscriptions.

However, this week Netflix (NFLX) has counter by offering downloads of television shows and movies. We will see in the next several weeks what impact the recent moves of each will have on their prices.

Here is Consumer Commentary’s take on Netflix.

As I said before I really do appreciate the insight provided with Kiplinger’s Personal Finance Magazine. Below is a portion of an example written by Kimberly Lankford.

. . . For starters they come in two varieties: Immediate-income annuities provide income right away; deferred annuities allow investors to save for retirement while deferring taxes.

With an immediate-income annuity, you give an insurance company a chunk of money in exchange for the insurer’s promise to send you regular payments for the rest of your life, or for a certainperiod of time. Immediate annuities can be an appropriate and simple way to invest some of your nest egg while you’re in retirement.

Deferred annuities, on the other hand, are complex investment products. Besides surrender charges, some charge annual fees that can top 2%, plus the management charges of the underlying investments.

The most common type of deferred annuities is a variable annuity, which lets you choose from among several mutual fund-like accounts. The value of your accounts rises and falls with the performance of those funds. An quity-indexed annuity is an exotic variation of deferred annuity that ties returns to stock-market indexes.

A deferred annuity offers tax benefits similar to those of a traditional non-deductible IRA. You don’t owe taxes until you begin making withdrawals, which are then taxed as ordinary income. Deferred annuities became much less appealing when the tax rate on capital gains dropped to 15% (or lower), in 2003, making it more attractive, tax-wise, to simply invest in stocks and mutual funds.

If you have never read www.kiplinger.com or the magazine for personal finance you are missing out. I just started a two-year subscription for $24 to Kiplinger’s and I was very happy with the first issue I received in the mail. I receive Money magazine as well and i think Kiplinger’s is a much better magazine revolving around the same theme of personal finance. Both magazine have much of the same type of beginning-level fair, but Kiplinger’s has some more sophisticated articles revolving around financial topics that are not necessarily rudimentary.

So Kiplinger magazine is a best-of magazine on personal finance with Money running second. It is the other way around when viewing kiplinger.com and money.com.

Now I have not spend a terribly large amount of time on kiplinger.com, but I have on money.com. I think Moneymagazine online is hea-and-shoulders above Kiplinger’s online. It was much more actionable information and more in-depth articles to help you in your day-to-day personal finance life.